The 5 Fidelity ETFs With The Highest Dividend Yields For Steady Income

Fidelity Investments is one of the largest asset managers in the world with a full menu of investment vehicles. Retirees looking for income should consider their exchange-traded funds (ETFs). These funds generally have low management fees, offer diversification and are easy to cash out of if needed.

“In a single trade, an ETF can give you exposure to hundreds or even thousands of different bonds, stocks, or other types of investments,” Fidelity explains.” That means the performance of your ETF is determined by the price change of all those assets.”

Here are five Fidelity ETFs currently providing over 5% annual dividend yield (as of Jan. 9).

#5 Fidelity Preferred Securities & Income ETF (FPFD)

This actively managed fund invests at least 80% in preferred securities and other income-producing securities. It uses the ICE BofA U.S. All Cap Securities Index as a benchmark. The FPFD portfolio is comprised of 68.58% bonds and 29.25% equities. Most of the bond holdings are rated BBB or BB.

• Annual dividend yield: 5.02%
• NAV: 21.84
• Expense ratio: 0.59%
• Assets under management: $76.08 million
• One-year performance: 2.14%

#4 Fidelity Tactical Bond ETF (FTBD)

This actively managed ETF seeks a high level of current income by investing in many types of bonds, including investment grade, high yield and even emerging markets. Its benchmark is the Bloomberg U.S. Aggregate Bond Index. About 45% of the portfolio is invested in U.S. Treasuries, with 39% in corporate bonds. 

• Annual dividend yield: 5.03%
• NAV: 49.66
• Expense ratio: 0.55%
• Assets under management: $32.15 million
• One-year performance: 3.62%

#3 Fidelity Sustainable High Yield ETF (FSYD)

This fund is an environmental, social and governance (ESG) play for green investors, but it’s also one of Fidelity’s current highest dividend yielding ETFs. Managers seek a high level of income by investing at least 80% of the fund’s assets in corporate debt securities rated below investment grade (also referred to as high yield debt securities or junk bonds). Investments are chosen based on companies that have improved sustainability practices.

Top bond holdings include Hilton Domestic Operating Co Inc., PG&E Corp. and CVS Health Corp.

• Annual dividend yield: 6.45%
• NAV: 48.63
• Expense ratio: 0.55%
• Assets under management: $85.75 million
• One-year performance: 2.69%

#2 Fidelity Enhanced High Yield ETF (FDHY)

This actively managed fund seeks high income by investing in high-yield debt securities, or junk bonds. Its benchmark is the ICE BofA BB-B US High Yield Constrained Index. Managers use a qualitative model to identify companies unlikely to default. 

• Annual dividend yield: 6.54%
• NAV: 49.35
• Expense ratio: 0.35%
• Assets under management: $464.45 million
• One-year performance: 2.38%

#1 Fidelity Yield Enhanced Equity ETF (FYEE)

This fund is currently Fidelity’s highest yielding ETF. Managers invest in companies with market capitalizations generally similar to companies in the S&P 500 and employ an options-based strategy designed to provide income. “The ETF builds off of the Fidelity Enhanced Large Cap Core strategy, layering on income-focused, short call option overlay,” the company explains.

The fund is most heavily weighted in technology, followed by financial services, communication services and consumer cyclicals. Its top 3 holdings are Nvidia Corp., Apple Inc. and Microsoft Corp.

Bonus: Fidelity is waiving the management fee on the first $250 million of the fund’s assets through Aug. 31.

• Annual dividend yield: 7.02%
• NAV: 28.97
• Expense ratio: 0.00%
• Assets under management: $129.47 million
• One-year performance: 7.76%